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Last week the U.S. Department of Commerce reported that the economic recovery was slowing, with growth recorded at a 2.2% rate in the first quarter of this year. Unemployment remains high, at more than 8%, while almost 13 million Americans are currently seeking work. Almost four million workers have been unemployed for a year or longer. Should economic growth remain anemic, unemployment will stay high. As we’ve seen over the past three years, fiscal stimulus, low interest rates, and targeted jobs programs have provided only a modest boost to the economy. But if we can find a way to get back to a 4% growth rate, the economy’s prospects will improve markedly and the unemployment rate will tumble. Indeed, if growth could be sustained at an average of 4% for two years, we would find ourselves back at a “full employment” jobless rate of less than 6%. Investing in our domestic energy sector can help get us back to that 4% goal. In fact, the energy sector, along with manufacturing — which has reaped a windfall from lower natural-gas prices — has been leading the modest economic expansion over the past two-and-one-half years. Over the past four-and-one-half years, the oil and gas sector has added more than 650,000 jobs. Put differently, since the start of the “Great Recession,” employment has grown 16% percent in the oil and gas industry while total employment nationally is still not back to its pre-recession level. Policies that encourage rather than retard energy investments are among the keys to achieving 4% growth. These include removing unreasonable restrictions on production both onshore and offshore, promoting the export of natural gas, moving ahead with the Keystone XL pipeline, and avoiding tax discrimination on the oil and gas industry.
Bernard L. Weinstein is Associate Director of the Maguire Energy Institute and an Adjunct Professor of Business Economics in the Cox School of Business at Southern Methodist University. He has taught at Rensselaer Polytechnic Institute, the State University of New York, the University of Texas at Dallas, and the University of North Texas. He has authored or co-authored numerous books, monographs, and articles on the subjects of economic development, energy security, public policy, and taxation. His work has appeared in professional journals as well as the popular press. He earned an A.B. degree from Dartmouth College and an M.A. and a Ph.D. in economics from Columbia University.Full Bio
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